The Broadbent Blog

A disappeared aid agency in search of a non-existent policy mandate

The decision to terminate CIDA as an independent agency of the federal government was not mentioned in Finance Minister Jim Flaherty’s budget speech on March 21. Furthermore, it is somewhat obscured in the text of the budget document, appearing, rather oddly, on page 241, in a chapter on “Supporting Families and Communities.”

The Canadian International Development Agency is to be amalgamated into a new Department of Foreign Affairs, International Trade, and Development, according to the budget, to “maximize opportunities for international synergies.” Such a major organizational shift warrants a more frank and open discussion. While there will continue to be a Minister for International Cooperation — just as there is a Minister of Foreign Affairs and a Minister for International Trade — major questions remain about how the proposed coordination between foreign policy, trade and aid will come about. This will be challenging in a department with three ministers.

Such questions may be resolved when the budget’s promise of a legislative mandate for the Minister, and for international development and humanitarian assistance, is fulfilled. The idea of a legal charter for Canada’s aid program is not new. Ever since Canada’s development assistance program began in 1968, no such framework has existed. For four decades it has been much debated, since the aid program — currently capped at around $4 billion — accounts for a significant amount of the federal government’s discretionary spending. Furthermore, Canada’s international engagement with developing countries arguably deserves a clearly articulated policy framework. For example, some of those who have pressed for a legislative aid mandate believe that its key purpose should be to work toward poverty reduction in developing countries.

So finally Canada may be getting a legislative framework for its aid program. The question is: what kinds of policies will such a framework enshrine? Will the legislation affirm Canada’s commitment to the principles of aid effectiveness, articulated in the OECD’s Paris Declaration? Or will it, instead, as CIDA itself announced after the budget was released, simply state that the government’s aim is “to enhance coordination of international assistance with broader Canadian values and objectives, and to put development on equal footing with trade and diplomacy"?

Ironically, the day prior to Mr. Flaherty’s budget, his Conservative counterpart in the UK, Chancellor of the Exchequer George Osborne, brought down a budget that bore many similarities to Canada’s, such as its preoccupation with deficit and debt reduction. However, with regard to the foreign aid program, the contrast could not be sharper. The Chancellor announced that, notwithstanding fiscal constraints and the ongoing recession, the UK was adhering to its long-standing plan of increasing its aid program by 37 percent in the next year in order to reach the level of 0.7 percent of GNI by 2013. This puts the UK into a select group of countries including only Sweden, Norway, Denmark, and Luxembourg. Canada once said that it aspired to reach the level of 0.7 when fiscal conditions permitted. But times have changed. Because Canada’s aid expenditures were effectively capped in 2010, its ODI/GNI ratio has languished in the range of 0.32-0.34 percent, a ratio that will fall when the economy eventually recovers and GNI rises.

Even putting aside Canada’s feeble efforts compared with the UK with regard to the quantity of aid, the quality of Canada’s aid program has increasingly come into question under the current Government. This is precisely why the proposal to align Canada’s aid with its foreign policy and commercial interests in an amalgamated department is of great concern.

Illustrating what this may entail, Bev Oda, Julian Fantino’s predecessor as Minister for International Cooperation, indicated that Canada’s aid program will henceforth work more closely with its mining firms investing in developing countries, a commitment reaffirmed under Fantino. Essentially, this policy states that Canada’s aid program exists to advance the commercial interests of its private mining (and perhaps other) firms. It loses sight of the basic fact that aid is principally for the benefit of developing country partners, not for the rich country donors or their private sector interests.

It took a few decades for the donor countries in the OECD to articulate principles of effective aid in the 2005 Paris Declaration. Those five principles comprise the ownership by partner countries of their national development strategies; the alignment by donors of their efforts with those strategies; the harmonization of donors’ and partners’ efforts at the country level; managing development aid for monitorable results; and mutual accountability by donors and their partners for their respective contributions. The Paris Declaration basically says that donors must work individually and jointly with their partners to help achieve the results that the developing countries are aiming for.

Unfortunately, last December, even though he had been aid minister for six months, Mr. Fantino appeared unfamiliar with the Paris Principles during an exchange in the House of Commons. One would think that within the first week in office a new aid minister would be fully briefed on such a fundamental aspect of the portfolio.

But it would be in keeping for this government to downplay international commitments and coordination in favour of its own domestic policy agenda. In fairness, when in office the Liberals too were not all that different when it came to the aid program. It was often seen as a pork-barrel to favour constituents with contracts since, in those days, aid expenditures were highly tied to Canadian suppliers. And the massive cuts to the aid program under the Chrétien government in the late 1990s have never been fully reversed in terms of restoring the ODA/GNI ratio to the 0.4-0.5 levels witnessed in the 1970s and 1980s.

On the positive side, if the Conservative Government does table its proposed legislative aid mandate, it will afford an opportunity for a more open public debate, in which we will have a chance to address the fundamental purposes of the aid program, and how those purposes may be best achieved. Hopefully, it will give Canada an opportunity to align itself with more enlightened donor countries, some of which, like the UK, may even be under conservative governments.